SAS

Earnings Release • Nov 30, 2023

Q4 2023: SAS SECURES FINANCING FOR THE FUTURE - KEY MILESTONE IN SAS' CHAPTER 11 PROCESS

Q4 2023: SAS SECURES FINANCING FOR THE FUTURE - KEY MILESTONE IN SAS' CHAPTER 11 PROCESS

I am pleased to conclude a busy year for SAS. Some 6.8 million passengers

traveled with SAS in the fourth quarter, which means that, in total, some 23.7

million passengers traveled with SAS during the full fiscal year 2022/2023. This

represents a passenger volume increase of 18 percent for the fourth quarter, and

a 33 percent year-on-year increase for the full fiscal year. This is a clear

confirmation of passengers continuing to return to SAS, and that our ramp-up

efforts throughout the year have been successful. We are also proud to have

achieved a five-star rating from our customers in the 2023 APEX Awards.

We are making steady progress in our Chapter 11 process in the US and in

reaching our overall targets in the SAS FORWARD plan with one major milestone

reached during the quarter. On October 3, SAS announced that Castlelake, Air

France-KLM and Lind Invest, together with the Danish state, had been selected as

the winning bidder consortium in SAS' exit financing solicitation process. We

entered an investment agreement with the bidding consortium shortly after the

end of the quarter. The agreement includes a total investment in the reorganized

SAS corresponding to approximately SEK 13.2 billion, including approximately SEK

5.2 billion in new unlisted equity and approximately SEK 8 billion in secured

convertible debt. The investment comprises a key step in our SAS FORWARD plan,

and confirms that our new investors believe in SAS and our potential to remain

at the forefront of the airline industry for years to come.

We currently target receiving approval of the Chapter 11 plan from the US court

in early 2024, to be followed by obtaining regulatory approvals and the

implementation of a Swedish company reorganization at the SAS AB level (likely

to be filed by SAS AB in 2024). As a result of that process, all of SAS AB's

common shares and listed commercial hybrid bonds are expected to be cancelled,

redeemed and delisted (currently expected to take place during the second

quarter of 2024). Consequently, there is no expected value for existing

shareholders in SAS AB and only a modest recovery is expected for the holders of

commercial hybrid bonds. SAS expects that its operations will be unaffected by

such legal proceedings and that it will continue to serve its customers as

normal.

AUGUST 2023-OCTOBER 2023

· Revenue: MSEK 12,019 (10,651)

· Income before tax (EBT): MSEK -2,110 (-1,701)

· Income before tax and items affecting comparability: MSEK -2,113 (-1,626)

· Net income for the period: MSEK -1,928 (-1,238)

· Earnings per common share: SEK -0.27 (-0.17)

NOVEMBER 2022-OCTOBER 2023

· Revenue: MSEK 42,043 (31,824)

· Income before tax (EBT): MSEK -5,516 (-7,846)

· Income before tax and items affecting comparability: MSEK -5,661 (-7,941)

· Net income for the period: MSEK -5,701 (-7,048)

· Earnings per common share: SEK -0.78 (-0.97)

SIGNIFICANT EVENTS DURING THE QUARTER

· Higher costs from adverse trends in currencies and fuel price cloaked

improved operational and commercial performance.

· The CJEU upheld the General Court's ruling that the loan guarantees granted

by Sweden and Denmark in 2020 were compatible with the applicable EU rules.

· Castlelake, Air France-KLM, Lind Invest and the Danish state were appointed

the winning bidder consortium in SAS' equity solicitation process, including an

agreement with Castlelake for new DIP loan to refinance SAS' original DIP loan.

SAS currently aims to receive approval from the US Court of the Chapter 11 plan

in early 2024, to be followed by obtaining regulatory approvals and a likely

Swedish company reorganization at the SAS AB level. SAS expects that there will

be only modest recovery for general unsecured creditors, no recovery for

subordinated unsecured creditors and that there will be no value for existing

shareholders in SAS AB following the completion of the restructuring

proceedings. All of SAS AB's common shares and listed commercial hybrid bonds

are expected to be cancelled, redeemed and delisted.

SIGNIFICANT EVENTS AFTER THE QUARTER

· SAS entered into an investment agreement with the winning bidder consortium

and a DIP term loan agreement with Castlelake. The agreements have been approved

by the US court.

· On Nov 15, SAS repaid its original DIP term loan that was provided by Apollo

Global Management.

· On Nov 29, the EU Commission announced that the recapitalization of SAS in

2020 complies with state aid rules and is approved.

OUTLOOK

· The year-end report includes a financial outlook on page 10.

QUARTERLY RESULTS

We noted continued healthy passenger demand through the fourth quarter with the

total number of passengers up 17.9 percent compared with the same period last

year. Year-on-year, our RPK increased 17.2 percent, while capacity increased

16.2 percent. Our flown load factor for the quarter was 77.8 percent, up 0.7

percentage points compared with the same period last year.

The increase in passenger demand and production led to a year-on-year increase

of 13 percent in our total operating revenue, which landed at SEK 12,019 million

for the quarter. After the significant depreciation of the Swedish Krona towards

the end of the quarter and the increase in jet fuel prices in the same period,

earnings before tax ended at a negative SEK 2,110 million, representing a year

-on-year decrease of SEK 409 million. However, for the full year, EBT increased

SEK 2,330 million to a negative SEK 5,516 million. The higher costs from adverse

trends in currencies and fuel prices are cloaking a significant part of the

achievements from stronger operational and commercial performance.

Cost reductions across the business remain in focus to secure our cost

competitiveness, and total operating expenses for the quarter ended at SEK

12,681 million. Many of the cost efficiencies of the SAS FORWARD plan are

ramping up over time, and some have been implemented but cannot be recognized in

our financial results until after emergence from Chapter 11, including cost

savings from the fleet restructuring.

The cash balance at the end of the quarter was SEK 6,160 million. Cash flow from

operating activities during the quarter amounted to an inflow of SEK 81 million.

UPDATE ON SAS' TRANSFORMATION PLAN

We launched our comprehensive business transformation plan SAS FORWARD in

conjunction with the publication of the first quarter report for FY2022, in the

end of February 2022. The aim of the plan is to secure long-term competitiveness

for SAS in the global aviation industry. On July 5, 2022, to accelerate the

implementation of SAS FORWARD, we announced that we had voluntarily filed in the

US for Chapter 11, a well-established and flexible legal framework for

restructuring businesses with operations in multiple jurisdictions. Through this

process, we aim to reach agreements with key stakeholders, restructure the

company's debt obligations, reconfigure our aircraft fleet and emerge with a

significant capital injection.

On October 3, SAS announced that we had selected Castlelake, Air France-KLM and

Lind Invest, together with the Danish state, as the winning bidder consortium in

our exit financing solicitation process. We entered into an investment agreement

with the bidding consortium shortly after the quarter ended. The agreement

entails a total investment in the reorganized SAS corresponding to approximately

SEK 13.2 billion, including approximately SEK 5.2 billion in new unlisted equity

and approximately SEK 8 billion in secured convertible debt. As part of the

transaction, we have also secured new Debtor-in-Possession ("DIP") financing of

SEK 5.5 billion from Castlelake. The funds from the new DIP financing agreement

are being used for, inter alia, refinancing SAS' original DIP term loan,

increasing liquidity, and supporting SAS' path to exit from its voluntary

restructuring proceedings. The refinancing of SAS' original term loan was

completed in November 2023.

As part of the transaction, SAS also intends to eventually exit the Star

Alliance and join the SkyTeam Alliance, of which Air France-KLM is a founding

member. This move towards a partnership with SkyTeam determines a clear path

forward for the company. Through the completion of this process and the

opportunities presented by being part of SkyTeam, we will be able to further

enhance SAS' offerings for the benefit of our colleagues, customers and

communities. This is a truly exciting step for SAS. However, it is important to

note that nothing is changing immediately. SAS is still part of Star Alliance

and our EuroBonus members will continue to enjoy their usual benefits when

flying on our partner airlines. Members can continue to accrue and redeem points

- just like today, and their benefits when they fly with SAS will not be

impacted.

The agreed exit transaction remains subject to approval in connection with the

confirmation of SAS' Chapter 11 reorganization plan. We currently target to

receive approval of the Chapter 11 plan from the US court in early 2024, to be

followed by obtaining regulatory approvals and the implementation of a Swedish

company reorganization at the SAS AB level (likely to be filed by SAS AB in

2024). As a result of that process, all of SAS AB's common shares and listed

commercial hybrid bonds are expected to be cancelled, redeemed, and delisted

(currently expected to occur during the second quarter of 2024). Consequently,

there is no expected value for existing shareholders in SAS AB and only a modest

recovery is expected for the holders of commercial hybrid bonds. SAS expects

that its operations will be unaffected by such legal proceedings and that it

will continue to serve its customers as normal.

FIVE-STAR RATING IN GLOBAL CUSTOMER RANKING

In September, SAS earned a five-star rating in the prestigious global APEX

customer ranking at the 2023 APEX Awards. The ranking is based on neutral, third

-party passenger feedback and insights gathered through APEX's partnership with

the world's highest-rated travel-organizing app. We are thrilled to achieve the

highest rating from our customers, and this recognition is a testament to the

tireless dedication of the SAS team in ensuring safe journeys, championing

sustainability initiatives and offering the highest service standards.

RED DOT AWARD FOR THE SAS APP

In September, SAS also won a Red Dot Award for its redesigned mobile app. The

Red Dot Award is one of the most prestigious and internationally recognized

design competitions, and celebrates outstanding achievements in the field of

design, creativity, and innovation. The SAS app received an award in the Brands

& Communication Design 2023 category. This achievement is a result of the hard

work and dedication of our talented team, and all supporting teams, who

continuously strive to create innovative solutions that deliver exceptional

experiences for our customers.

STEPS TOWARDS FOSSIL-FREE AVIATION

SAS aims to decarbonize aviation and progress on this ambitious plan can only be

achieved through collaboration. By involving our customers and teaming up with

them, we can reduce CO\2\ emissions and enable increased large-scale production

of sustainable aviation fuels.

SAS strives to be a driving force in sustainable aviation and is proud to

participate in a large-scale international study using a SAS aircraft at

Copenhagen Airport to investigate sustainable aviation fuel (SAF) flights'

impact on local air quality. The project began during Q1 FY2023, and one of the

conclusions drawn is that bio-based aviation fuel reduces the number of

ultra­fine particles that are emitted from the aircraft engines by approximately

30 percent, thereby improving air quality. SAS is very proud to participate in

this project as it is a great example of how our collective efforts can enable

further discoveries of sustainable solutions for the aviation industry. The

findings of this unique experiment at Copenhagen Airport showcase that using SAF

not only reduces CO\2\ emissions but also enhances local air quality.

THE COMING WINTER SEASON

We have entered the winter season and we look forward to flying our passengers

to their destinations. We have added several new routes and destinations for the

winter season. In October, SAS inaugurated the new winter season route to

Bangkok from Copenhagen. Thailand is a favorite destination among many

passengers during the winter season and the Bangkok route will offer a perfect

entry point for wider Thailand and Asia, and be a great option both for business

and for leisure travelers. SAS operates the Bangkok route with Airbus A350

aircraft, which have much lower fuel consumption and up to 30 percent lower

CO\2\ emissions than previous comparable aircraft.

We continue our work towards completing our Chapter 11 process in the US, and

towards reaching the objectives in the SAS FORWARD plan. The aim is currently to

receive approval from the US court of the Chapter 11 plan in early 2024, to be

followed by obtaining regulatory approvals and the implementation of a Swedish

company reorganization at the SAS AB level. While work still remains, I am

pleased to see the substantial progress we are making to becoming a competitive

and financially strong company.

I am grateful for the really hard work of my colleagues at SAS for the progress

of SAS FORWARD to date, and for everything they do to ensure that we take the

best possible care of our customers on a daily basis. Thank you for all your

efforts!

As always, we look forward to welcoming our customers on board our aircraft.

Anko van der Werff

President & CEO

Stockholm, November 30, 2023

Teleconference - Q4 2023

A teleconference and webcast for investors, analysts and media will be held at

10.00 AM CET. Anko van der Werff, President & CEO and Erno Hildén, Executive

Vice President & CFO, will present and comment on the report. The presentation

will be held in English.

Access via web link (no advance notification is necessary):

https://ir.financialhearings.com/sas-q4-2023

Link to register for participation via telephone:

https://conference.financialhearings.com/teleconference/?id=5007048

After registration you will be provided phone numbers and a conference/user ID

to access the conference. You can ask questions verbally via the teleconference.

For further information, please contact:

SAS press office, +46 8 797 29 44

Investor relations, +46 709 977 070

SAS, Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and

Stockholm, flies to destinations in Europe, USA and Asia. Spurred by a

Scandinavian heritage and sustainability values, SAS aims to be the driving

force in sustainable aviation and in the transition toward net zero emissions.

We are continuously reducing our carbon emissions through using more sustainable

aviation fuel, investing in new fuel-efficient aircraft and technology

innovation together with partners - thereby contributing towards the industry

target of net zero CO2 emissions by 2050. In addition to flight operations, SAS

offers ground handling services, technical maintenance, and air cargo services.

Learn more at https://www.sasgroup.net

This is information that SAS AB is obliged to make public pursuant to the EU

Market Abuse Regulation. The information was submitted for publication, through

the agency of Erno Hildén, at 08:00 a.m. CET on November 30, 2023.